New Zealand’s services sector increased its expansion during May, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for May was 53.3 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 3.2 points from April, but still below the long-term average of 53.6 for the survey.
BusinessNZ chief executive Kirk Hope said that the lift in expansion was welcomed after a dip in April. In terms of the sub-index results, all five measures showed expansion with Stocks/Inventories (56.8) leading the way, followed by New Orders/Business (55.4).
“The lift in expansion for May also saw a pick up in the proportion of positive comments, which rose from 39.8% in April to 50.6% for the current month. Overall, positive comments received did not show any defining themes. Instead, comments were either industry specific or very general around increased activity”.
BNZ Senior Economist Craig Ebert said that “the bounce back in the PSI in May arguably helped calm a lot of nerves – after it sagged to 50.1 in April, and after the services component of Q1 GDP declined 0.6%. Still, this doesn’t deny the economy is on a broadly slowing trajectory, which is what’s required to take the inflationary heat out of it”.
